Pace of household lending slows in July

The growth pace of household lending by local banks slowed down in July amid a marginal drop in both mortgage and non-mortgage loans, central bank data showed Thursday.

Outstanding household loans from banks came to 796.6 trillion won ($711.4 billion) as of the end of last month, up 4.8 trillion won from June, according to the data from the Bank of Korea (BOK).

The on-month gain slowed down from 5 trillion won tallied in June and marked the smallest on-month growth since March, when bank lending rose 4.3 trillion won.

Home-backed mortgages climbed by 3.1 trillion won on-month to 587.7 trillion won last month, slightly narrowing from a 3.2 trillion-won gain in June.

Also, non-mortgage loans, including lending through overdraft lines of credit, gained 1.7 trillion won on-month to 208 trillion won in July, slowing from a 1.8 trillion-won expansion tallied in the previous month.

The central bank said the growth pace of household lending seems to have returned to the average level before the real estate boom in the 2015-16 period thanks to a series of measures to raise borrowing costs and tighten mortgage rules for owners of multiple homes.

Household loans by banks grew an average 3 trillion won on-month in June during the 2010-14 period, compared with an average of 7.3 trillion won in 2015-16 and 6.2 trillion won in 2017.